Lecture22 2010.12.07 PostClass

Lecture22 2010.12.07 PostClass - Lecture 22 Financial...

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Lecture 22 Financial Statement Analysis, Academic Research, Current Issues
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Announcements: Exam #3 • Exam #3: 12/17 3-5pm – Locations (posted online): Chem 102 A -Gr Cohn G17 Gu - Lia DRL A1 Lie - Pin MEHY B1 Pip - Z • Conflicts for Exam #3: – No conflicts received so far. Deadline to notify 12/6 – ACCT102 students: Prof. Gonedes will reschedule the 102 exam – Sabbath starts at 4:19pm on 12/17 • Sabbath accommodation exam, 12/17 2-4pm, SHDH 215
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Announcements: Regrades • Exam #1 regrade requests completed – Grades updated on webCafe – Pick-up from TA office hours (along with FAQ sheet) • Exam #2 regrade requests completed – Grades updated on webCafe – Pick-up from TA office hours (along with FAQ sheet) • Exam pickup – Pickup any remaining exams from TA office hours – This is the FINAL week to pickup exams • ABSOLUTELY NO requests to pickup exams after this week
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Announcements: Misc. • Review grades on webCafe – Notify of any errors by Wed (12/6) • Homework #4 due Wed (12/6) at 9am • Review key concepts for Exam #3 in class on Wed (12/6) • Last week for Prof. and TA office hours – No office hours next week – No last-minute emails, last day to email 12/15
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Financial Statement Analysis
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Framework for Financial Statement Analysis Financial Reports Analytic Tools Other Information (e.g., macro news, product innovations) Business Strategy Analysis Accounting Analysis Financial Analysis Prospective Analysis Business Decision Context equity security analysis, credit analysis, M&A analysis, IPO analysis etc.
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Financial Analysis The underlying purpose of financial analysis is to identify and evaluate the financial performance of a firm. – To identify the underlying factors that “cause” its performance – To identify any factors that give rise to any unusual performance (good or bad). – To identify the underlying risks. Financial statements, which describe the result of past transactions and events, represent a widely available, relatively standardized source of information. For that reason, they are used extensively as a basis for financial analysis.
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• One of the problems that an analyst has to deal with when trying to use financial statement data is the relatively large amount of data that is available. – What should I look at? • What information is relevant to an analysis of performance/profitability? of risk? • Is some information more useful than others? – How do I compare the operations of two similar firms? • One reason for using ratios rather than the raw data is to focus attention on (potentially) important relationships. – Another is to eliminate irrelevant differences due to the scale of operations when making comparisons among firms of different size. – Greater $$$ earnings does not imply greater $$$ price
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This note was uploaded on 12/18/2010 for the course ACCT 101 taught by Professor Armstrong during the Fall '09 term at UPenn.

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Lecture22 2010.12.07 PostClass - Lecture 22 Financial...

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